Brokerage sees lower investor payouts in 2023, downgrades Coterra and PDC Energy to 'hold'

PDC Energy

12/12/2022 14:29

** Truist Securities downgrades both Coterra Energy Inc
 CTRA.N  and PDC Energy Inc  PDCE.O  to "hold" from "buy"
    ** Brokerage also downgrades Murphy Oil  MUR.N  to "hold"
from "buy" and cuts PT to $46 from $61, sending shares down 1.3%
at $40.4 in premarket trade
    Coterra Energy
    ** Truist Securities ("hold") cuts PT to $26 from $46 
    ** Says Coterra will be exposed to the elements given less
than 10% of its 2023 production forecast is hedged
    ** Brokerage forecasts CTRA to generate ~$1 bln less in
free-cash-flow for 2023, limiting investor return
    ** CTRA's ability to drive capital efficiency amid an
inflationary oil-field services environment poses a potential
limit to free-cash-flow potential - Truist
    ** Nine of 26 brokerages rate the stock "buy" or higher, 15
"hold" and two "sell" or lower; their median PT is $34.33
    PDC Energy
        ** Truist Securities ("hold") cuts PT to $68 from $100
    ** Brokerage forecasts potential decline in 2023
free-cash-flow of over 30% YOY largely due to lower prices,
higher operating costs, and higher capital spend
    ** Estimates free-cash-flow yield for 2023 of less than 20%
resulting in reduced YOY investor payouts
    ** Nine of 14 brokerages rate the stock "buy" or higher,
five "hold"; their median PT is $94.50
 (Reporting by Arshreet Singh in Bengaluru)
 ((Arshreet.Singh@thomsonreuters.com))